NC Budget and Tax Center

The North Carolina labor market needs real solutions

The House is poised to to introduce an “economic development” bill that they claim will boost the economy, but almost certainly will fail to provide real solutions to the lack of available jobs and long-term economic mobility needed by North Carolinians. While the full details of the bill have not been released, reports suggest it will include more give-aways to large corporations that will do little to change North Carolina’s economic vitality. Signals to date indicate that the bill will expand corporate incentives and give large multi-state companies another big tax break. We’ve already read this story before, and it doesn’t end well for many small businesses, struggling rural communities, or workers who have not seen a raise in years. Any new proposals should be carefully considered, but old ideas that have already proven inadequate won’t magically fix what ails the North Carolina economy.

Certainly, North Carolina’s labor market could use the support of sound public policies that could strengthen the recovery and ensure that it is delivering broad benefits to all North Carolinians not just a select few. The state’s job deficit stands at more than 400,000 jobs needed to provide employment to all who want to work, the number of unemployed people in the state remains elevated relative to pre-recession levels and poverty has not come down nor have wages grown as the economy has recovered.  There is a long way still for North Carolina to go in addressing the economic damage of the Great Recession, ensuring all communities enjoy a recovery and that all who want to work can and can support their families doing so.

At this critical moment then public policies should not be blunt instruments but instead reflect the real economic challenges facing North Carolina and address them head on. Here are some of the criteria that we will use to assess the bill when it is available:

  • Will proposals directly help local small businesses and not just large, footloose corporations? To date policies coming out of the General Assembly have privileged the interests of large, multi-state corporations, often at the expense of native North Carolina companies. Small and growing firms are where most of the new jobs come from, so that’s where the legislature’s attention should be focused. Instead, much of the policy ideas have subsidized behavior of large profitable corporations that would already occur or worse if it does occur is likely to take place in another state.
  • Will policies invest in real people and places? The brick and mortar of long-term growth is investment in human and physical infrastructure. We need bold efforts to ensure that people have the skills that growing industries are looking for, that companies can get goods to market, that we cultivate the talent needed to invent the technologies of the future, and that North Carolina remains an attractive place to call home. To make that possible, the state must ensure it has revenue available to invest in schools, community colleges and infrastructure projects.
  • Will policies help the most struggling communities, or reinforce the concentration of economic activity in a few areas of the the state? There are still 60 counties that have fewer employed people than before the recession started and many are struggling with the loss of major industries in their communities. These communities and the workers and business owners there need public policies that are targetted locally, or reinforce regional connections, to support new industries and growing companies and deliver a high quality of life across the state.
  • Will policies increase wages? North Carolina has proven that it is possible for the market to create low-wage jobs. The recovery has seen a boom in jobs paying less than a living wage (more than half of those created since 2009 pay poverty-level wages). The role of public policy is not to encourage low-wage job creation which create costs down the road but to ensure the creation of good, quality jobs if taxpayer dollars are going to be used.

Over the course of the week, we will be digging into the House bill and its proposals for JDIG, changes to corporate income tax apportionment and other aspects to share just how far these ideas stack up against the real challenges North Carolina faces today. There are better ideas out there to support the state’s economy as it repositions itself to be competitive in the next century.

While it is important that policymakers recognize there is a role for public policy in building a strong foundation for the economy, it is time to start designing policies that respond to the state’s economic realities and focus on supporting working families.


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